Ralph Robbins
Certified Financial Planner
Ralph S. Robbins, CFP©, is a licensed Certified Financial Planning Practitioner and an Accredited VA Claims Agent specializing in Eldercare Financial Planning. He works everyday helping families in crisis find creative ways to fund long-term care expenses and deal with family financial issues.
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Question
How do we protect our Mom's money in the bank?
Ella..if all you are talking about is what may be left in the QIT (Irrevocable Qualified Income Trust) at your mother's demise, you may... Ella..if all you are talking about is what may be left in the QIT (Irrevocable Qualified Income Trust) at your mother's demise, you may be misunderstanding the purpose and terms of the trust.
A QIT is created for a Medicaid recipient who's income exceed the state income cap for Medicaid eligibility (currently $2,199 in Florida for 2015 and changes annually).
Each month the trustee of the QIT places an amount equal to the amount of the Medicaid recipient's income that exceeds the income cap into a bank account titled in the name of the trust. Funds placed in the trust account may only be used for the cost of care for the Medicaid recipient. Ideally, the account is spent down each month to $0 for this purpose.
If there are any funds remaining in the trust account at the demise of the Medicaid recipient, the funds must go to the state to reimburse the state for Medicaid benefits received. Typically (if the account is handled properly), this a should not be more than one month's income.
Money should not accumulate in the account.
There is no other legal alternative for funds placed in a QIT account; they either go to cost of care or back to the state. see more
A QIT is created for a Medicaid recipient who's income exceed the state income cap for Medicaid eligibility (currently $2,199 in Florida for 2015 and changes annually).
Each month the trustee of the QIT places an amount equal to the amount of the Medicaid recipient's income that exceeds the income cap into a bank account titled in the name of the trust. Funds placed in the trust account may only be used for the cost of care for the Medicaid recipient. Ideally, the account is spent down each month to $0 for this purpose.
If there are any funds remaining in the trust account at the demise of the Medicaid recipient, the funds must go to the state to reimburse the state for Medicaid benefits received. Typically (if the account is handled properly), this a should not be more than one month's income.
Money should not accumulate in the account.
There is no other legal alternative for funds placed in a QIT account; they either go to cost of care or back to the state. see more
Question
What are valid expenses that reduce income to avoid exceeding the Veterans Aid & Attendance income limit?
imb1234 and for others that may be reading this thread: Veterans Home Care (VHC), as you probably know, is not affiliated with the VA. ... imb1234 and for others that may be reading this thread:
Veterans Home Care (VHC), as you probably know, is not affiliated with the VA. They are a private company and the deal is essentially this:
The veteran or surviving spouse signs a contract with VHC. VHC has contracts with home care agencies. VHC files the application for benefits and arranges for home care to be delivered to the claimant through one of their contracted agencies while the application is being processed. Once approved, any retroactive benefit goes to VHC to reimburse VHC for the care delivered.
The contract with VHC, however, usually requires that you continue to retain them to deliver home care services for a period of time after approval. VHC claims to provide care at "no up front cost" to the claimant but "no up front cost" does not mean "no cost". How do they make money if they don't charge the claimant (they are, to be sure, a for-profit enterprise)?.
The answer is that they pay the agency a certain fee and add a premium to the hourly rate being charged the claimant. VHC's profit is the "spread", or the difference between, what the claimant is charged for services and what VHC pays the agency. So, in reality, the claimant is indeed "paying" for VHC's services in that if it were not for the premium going to VHC, the claimant would have more of the VA award to spend on service hours.
I caution against this arrangement for this very reason. The claimant can usually do better by negotiating their own rate with a home care agency or other provider of services. The true cost of VHC's services must be carefully weighed against other alternatives.
For instance, the primary benefit of VHC's services is that the claimant does not have to wait to receive care if the claimant cannot otherwise afford to pay for care while the claim is pending. In this case, securing a low cost loan for this purpose might be a better alternative in that the claimant has freedom of choice of care provider, no restrictive ongoing obligation, and will probably end up with more service hours in the long run.
There are other companies that operate in a similar manner to VHC and all claim to be helping claimants for "free" or with "no up front cost". They can easily be discerned by their willingness to provide care while the claim is pending. see more
Veterans Home Care (VHC), as you probably know, is not affiliated with the VA. They are a private company and the deal is essentially this:
The veteran or surviving spouse signs a contract with VHC. VHC has contracts with home care agencies. VHC files the application for benefits and arranges for home care to be delivered to the claimant through one of their contracted agencies while the application is being processed. Once approved, any retroactive benefit goes to VHC to reimburse VHC for the care delivered.
The contract with VHC, however, usually requires that you continue to retain them to deliver home care services for a period of time after approval. VHC claims to provide care at "no up front cost" to the claimant but "no up front cost" does not mean "no cost". How do they make money if they don't charge the claimant (they are, to be sure, a for-profit enterprise)?.
The answer is that they pay the agency a certain fee and add a premium to the hourly rate being charged the claimant. VHC's profit is the "spread", or the difference between, what the claimant is charged for services and what VHC pays the agency. So, in reality, the claimant is indeed "paying" for VHC's services in that if it were not for the premium going to VHC, the claimant would have more of the VA award to spend on service hours.
I caution against this arrangement for this very reason. The claimant can usually do better by negotiating their own rate with a home care agency or other provider of services. The true cost of VHC's services must be carefully weighed against other alternatives.
For instance, the primary benefit of VHC's services is that the claimant does not have to wait to receive care if the claimant cannot otherwise afford to pay for care while the claim is pending. In this case, securing a low cost loan for this purpose might be a better alternative in that the claimant has freedom of choice of care provider, no restrictive ongoing obligation, and will probably end up with more service hours in the long run.
There are other companies that operate in a similar manner to VHC and all claim to be helping claimants for "free" or with "no up front cost". They can easily be discerned by their willingness to provide care while the claim is pending. see more
Question
What are valid expenses that reduce income to avoid exceeding the Veterans Aid & Attendance income limit?
whatsaname: There really is not much to "maintaining compliance". The claimant is simply required to notify the VA of any... whatsaname: There really is not much to "maintaining compliance". The claimant is simply required to notify the VA of any changes in income, assets, or expenses. Any questions can be easily answered by contacting the VA directly so there really is no need for an intermediary while receiving benefits. I suggest you read the contract signed with this company and find out what the options are to terminate it. see more
Question
What are valid expenses that reduce income to avoid exceeding the Veterans Aid & Attendance income limit?
The maximum VA Pension benefit with Aid and Attendance for an eligible surviving spouse is $1,149 per month. To receive the maximum amount... The maximum VA Pension benefit with Aid and Attendance for an eligible surviving spouse is $1,149 per month.
To receive the maximum amount the claimant must have Net Income for VA Purposes (IVAP) of $0.
To calculate IVAP begin with GROSS income from all sources.
The claimant then deducts from gross income eligible Unreimbursed Medical Expenses (UME) which may include virtually any ongoing, regular medically related expense including the cost of Medicare insurance premiums (Part B, D, and supplements), life alert systems, physician and Rx co-pays, transportation expenses, durable medical equipment rentals, the cost of home care (provided by an agency or privately), and assisted living facility room and board.
Private household expenses are not deductible.
A deductible of $35.95 per month is then applied. If the net result is $0 or less, the full pension award will be granted. If the net result is below the maximum pension benefit of $1,149, then a partial award may be granted.
The benefit is paid directly to the claimant by monthly electronic transfer. The claimant then pays their expenses from these funds. The claimant is free to use any provider they choose and may change providers at will. The VA must be notified of any changes in income or expenses.
I am very interested to learn what you mean by "the bulk of it goes to the company that is keeping her in compliance". What does that mean? Is she receiving services from a home care company that applied for the benefit for her? see more
To receive the maximum amount the claimant must have Net Income for VA Purposes (IVAP) of $0.
To calculate IVAP begin with GROSS income from all sources.
The claimant then deducts from gross income eligible Unreimbursed Medical Expenses (UME) which may include virtually any ongoing, regular medically related expense including the cost of Medicare insurance premiums (Part B, D, and supplements), life alert systems, physician and Rx co-pays, transportation expenses, durable medical equipment rentals, the cost of home care (provided by an agency or privately), and assisted living facility room and board.
Private household expenses are not deductible.
A deductible of $35.95 per month is then applied. If the net result is $0 or less, the full pension award will be granted. If the net result is below the maximum pension benefit of $1,149, then a partial award may be granted.
The benefit is paid directly to the claimant by monthly electronic transfer. The claimant then pays their expenses from these funds. The claimant is free to use any provider they choose and may change providers at will. The VA must be notified of any changes in income or expenses.
I am very interested to learn what you mean by "the bulk of it goes to the company that is keeping her in compliance". What does that mean? Is she receiving services from a home care company that applied for the benefit for her? see more
Question
What are valid expenses that reduce income to avoid exceeding the Medicaid income limit?
Sorry for the delay in responding. First, if you have an attorney your question, I would think, would have been or should be addressed by... Sorry for the delay in responding. First, if you have an attorney your question, I would think, would have been or should be addressed by him or her.
The program income limit in WI is $2,199 per month. Her net income after permitted medically related expenses must fall under this maximum to qualify for benefits. WI is not an "income cap" state in that a Medicaid recipient with income over the program limit must create a Qualified Income Trust ("Miller" Trust) to qualify for benefits. I do not believe a Qualified Income Trust will be effective in WI.
I doubt it will be an issue, however, given her high cost of care (unless, of course, her income - yours is not counted - is exceptionally high). see more
The program income limit in WI is $2,199 per month. Her net income after permitted medically related expenses must fall under this maximum to qualify for benefits. WI is not an "income cap" state in that a Medicaid recipient with income over the program limit must create a Qualified Income Trust ("Miller" Trust) to qualify for benefits. I do not believe a Qualified Income Trust will be effective in WI.
I doubt it will be an issue, however, given her high cost of care (unless, of course, her income - yours is not counted - is exceptionally high). see more
Question
What are valid expenses that reduce income to avoid exceeding the Medicaid income limit?
Medicaid eligibility rules with respect to income vary by state...what state are you in?
Question
My Mom was approved for aid and attendance, but now moving to another state. Will she have to reapply?
No she will not as it is a Federal program. She is required, however, to notify the VA of change of address and any change in financial... No she will not as it is a Federal program. She is required, however, to notify the VA of change of address and any change in financial circumstances (both income and expenses). see more
Question
Does an eldery person who served in military qualify for care-medical if he didnt serve during wartime?
Yes he most likely is. The best way to find out is to fill out an application for health benefits: http://www.va.gov/healthbenefits/apply/... Yes he most likely is. The best way to find out is to fill out an application for health benefits: http://www.va.gov/healthbenefits/apply/
There are two agencies under the VA - the Veterans Healthcare Administration (VHA) and the Veterans Benefits Administration (VBA). The former handles health benefits, the latter, cash benefits.
Though he would have to have served during wartime for cash benefits (Pension, but not necessarily Compensation), he does not have to have served during wartime for health benefits.
Once he is in the system ask the VA primary care physician to enroll him in Geriatric Extended Care program which will provide home visits, adult day care, durable medical equipment and incontinence supplies not covered by Medicare. see more
There are two agencies under the VA - the Veterans Healthcare Administration (VHA) and the Veterans Benefits Administration (VBA). The former handles health benefits, the latter, cash benefits.
Though he would have to have served during wartime for cash benefits (Pension, but not necessarily Compensation), he does not have to have served during wartime for health benefits.
Once he is in the system ask the VA primary care physician to enroll him in Geriatric Extended Care program which will provide home visits, adult day care, durable medical equipment and incontinence supplies not covered by Medicare. see more
Question
Can I set up some sort of trust that would enable my brother to get into an assisted living situation?
I am not sure I understand your question. If you are concerned about current eligibility for public benefits there is no issue. The way... I am not sure I understand your question. If you are concerned about current eligibility for public benefits there is no issue. The way you describe the situation, money was left to you and never passed through your brother's possession and he, therefore, has never had any incidence of ownership. That being the case, and since you state he has no other assets, there should be no issue with him qualifying for public benefits.
If the issue is "What happens if you predecease him?", then establishing a trust on a current basis, but certainly a testamentary trust (one that is created at your demise), makes sense as you do not want him to inherit anything that would disqualify him for public benefits.
Your estate plan can be structured so that your Will (or revocable living trust), creates an irrevocable trust or irrevocable special needs trust for your brother's benefit at your demise (this is the aforementioned "testamentary provision"). In either event a trustee will handle the funds.
The decision to establish a trust now and transfer funds, or for it to happen on a testamentary basis may be based, in part on tax issues. Savings bonds held for long periods of time may have large taxable gains. Be mindful of the tax effects of liquidations/gifts/inheritance/trusts.
The goal, of course, will be to preserve public benefit eligibility and to have a third party managing his financial affairs.
The above is information available to the general public, is provided for informational and educational purposes only, and should not be considered financial or legal advice. see more
If the issue is "What happens if you predecease him?", then establishing a trust on a current basis, but certainly a testamentary trust (one that is created at your demise), makes sense as you do not want him to inherit anything that would disqualify him for public benefits.
Your estate plan can be structured so that your Will (or revocable living trust), creates an irrevocable trust or irrevocable special needs trust for your brother's benefit at your demise (this is the aforementioned "testamentary provision"). In either event a trustee will handle the funds.
The decision to establish a trust now and transfer funds, or for it to happen on a testamentary basis may be based, in part on tax issues. Savings bonds held for long periods of time may have large taxable gains. Be mindful of the tax effects of liquidations/gifts/inheritance/trusts.
The goal, of course, will be to preserve public benefit eligibility and to have a third party managing his financial affairs.
The above is information available to the general public, is provided for informational and educational purposes only, and should not be considered financial or legal advice. see more
Question
Life insurance for private pay at LTC facility. Options?
Term life insurance has no cash value and therefore is not a countable asset for Medicaid eligibility purposes. The state cannot compel... Term life insurance has no cash value and therefore is not a countable asset for Medicaid eligibility purposes. The state cannot compel the owner to sell the policy on the open market and the state will not assign any value to the policy.
Whereas the policy is not a countable asset under any circumstances, there is no penalty to a Medicaid applicant if ownership of the contract is transferred.
The new owner will have to pay the premium as there will be no funds available from the Medicaid applicant's income to pay the premium once they are receiving Medicaid benefits.
If you do transfer the policy try to do so before applying for benefits as you will then not even have to disclose the existence of the policy (and you will not have to report the transfer of same since, once again, it is not a countable asset).
Also, remember to change the beneficiary (I am sure you will since that was the intent to begin with).
The above is provided for informational and educational purposes only, is generally available to the public, and should not be considered financial or legal advice. see more
Whereas the policy is not a countable asset under any circumstances, there is no penalty to a Medicaid applicant if ownership of the contract is transferred.
The new owner will have to pay the premium as there will be no funds available from the Medicaid applicant's income to pay the premium once they are receiving Medicaid benefits.
If you do transfer the policy try to do so before applying for benefits as you will then not even have to disclose the existence of the policy (and you will not have to report the transfer of same since, once again, it is not a countable asset).
Also, remember to change the beneficiary (I am sure you will since that was the intent to begin with).
The above is provided for informational and educational purposes only, is generally available to the public, and should not be considered financial or legal advice. see more
Question
When applying for Medicaid, is a term life insurance policy counted as an asset?
Term insurance has no cash value and is not considered a countable asset. The state cannot compel the owner to sell the policy for a life... Term insurance has no cash value and is not considered a countable asset. The state cannot compel the owner to sell the policy for a life settlement as suggested by another post. Further, the death benefit will escape Medicaid Estate Recovery as long as the beneficiary is not the estate of insured. In other words, the beneficiary should be a trust or real person.
The information above is provided for informational and educational purposes only, is generally available to the public, and should not be considered financial or legal advice. see more
The information above is provided for informational and educational purposes only, is generally available to the public, and should not be considered financial or legal advice. see more
Question
Mom is in a nursing home and in the penalty period for Medicaid. How is this typically handled?
The business office in the nursing home will typically suggest that you simply spend all her assets down. When you say "she is in a... The business office in the nursing home will typically suggest that you simply spend all her assets down.
When you say "she is in a penalty period" this implies that she has applied for Medicaid and that her assets were to high to qualify. As a result, the state imposed a "penalty period" which is calculated by dividing the amount of her countable assets over the resource allowance (the amount she is permitted to retain) of $2,000 by the State of Indiana's Divestment Penalty Divisor of $5,733. The result is the number of month's of ineligibility.
Ex: Mother has $53,733 over the limit of $2,000. $53,733 / $5,733 = 10 penalty months.
Essentially, therefore, mom will be compelled to pay for her own care - spend down her assets - until she reaches the limit of $2,000. At that point she will be permitted to retain only $52 per month of her income for all of her personal needs. This, to me, does not represent a good plan.
If you transfer her assets in a manner that will not trigger a penalty you can then reapply prior to the expiration of the penalty period (like now) and preserve money for her use WHILE receiving Medicaid benefits.
Here is one idea: http://nonprofitpooledtrust.org/
The above is provided for educational and informational purposes, is from sources available to the general public, and should not be considered legal or financial advice. see more
When you say "she is in a penalty period" this implies that she has applied for Medicaid and that her assets were to high to qualify. As a result, the state imposed a "penalty period" which is calculated by dividing the amount of her countable assets over the resource allowance (the amount she is permitted to retain) of $2,000 by the State of Indiana's Divestment Penalty Divisor of $5,733. The result is the number of month's of ineligibility.
Ex: Mother has $53,733 over the limit of $2,000. $53,733 / $5,733 = 10 penalty months.
Essentially, therefore, mom will be compelled to pay for her own care - spend down her assets - until she reaches the limit of $2,000. At that point she will be permitted to retain only $52 per month of her income for all of her personal needs. This, to me, does not represent a good plan.
If you transfer her assets in a manner that will not trigger a penalty you can then reapply prior to the expiration of the penalty period (like now) and preserve money for her use WHILE receiving Medicaid benefits.
Here is one idea: http://nonprofitpooledtrust.org/
The above is provided for educational and informational purposes, is from sources available to the general public, and should not be considered legal or financial advice. see more
Question
Is there any financial assistance for myself in taking care of my Mom (94)?
If mom is 94 she may have been married to a veteran who's service will permit her to be eligible for Improved Pension perhaps with Aid... If mom is 94 she may have been married to a veteran who's service will permit her to be eligible for Improved Pension perhaps with Aid and Attendance. Do a search on this site for this program. Caveat: this is a needs based program (income and asset limitations) and she must have been married to the veteran when he passed.
If she is eligible and can qualify she can pay you as a caregiver from this benefit ($1,149 per month in 2015). see more
If she is eligible and can qualify she can pay you as a caregiver from this benefit ($1,149 per month in 2015). see more
Question
If my Dad needs to go to a nursing home (he does qualify for Medicare) and they take his SS check, what will h...
All states have relatively strong Community Spouse protections in place to prevent the spouse not receiving benefits from sinking into (or... All states have relatively strong Community Spouse protections in place to prevent the spouse not receiving benefits from sinking into (or deeper into) poverty.
In your state of New Hampshire, the Community Spouse is permitted to retain a minimum of $1,966 (up to a maximum of $2,931) of the couple’s combined income. In other words, if your father receives nursing home Medicaid benefits, all of his income will be diverted to your mother (and vice versa).
The same holds true with assets in that there is a Community Spouse Resource Allowance protecting some of the couple’s assets for the spouse not receiving benefits (the minimum that may be retained in New Hampshire is $23,448). The homestead residence, by the way, is always an exempt resource.
With respect to VA benefits, what mom may receive as a survivor depends on the benefit father is receiving. If he is receiving compensation for injury or disability as a result of service then mom continuing to receive this benefit or a portion thereof at his demise will depend on the specific circumstances.
If he is receiving Improved Pension, a needs based benefit, the benefit will end at his demise and mother will have to apply for a survivor’s benefit. The bottom line for mother is that as the surviving spouse of a wartime veteran she will absolutely be able to apply for survivor’s Improved Pension (technically called “Death Pension”); the full award for 2014 was $1,130 per month.
If, in fact, your father is receiving disability compensation currently you should look at applying for Improved Pension now. The maximum award for a couple is currently $2,085 per month. You may wish to contact your regional VBA office to verify the nature of your father’s benefit: http://www.benefits.va.gov/manchester/ see more
In your state of New Hampshire, the Community Spouse is permitted to retain a minimum of $1,966 (up to a maximum of $2,931) of the couple’s combined income. In other words, if your father receives nursing home Medicaid benefits, all of his income will be diverted to your mother (and vice versa).
The same holds true with assets in that there is a Community Spouse Resource Allowance protecting some of the couple’s assets for the spouse not receiving benefits (the minimum that may be retained in New Hampshire is $23,448). The homestead residence, by the way, is always an exempt resource.
With respect to VA benefits, what mom may receive as a survivor depends on the benefit father is receiving. If he is receiving compensation for injury or disability as a result of service then mom continuing to receive this benefit or a portion thereof at his demise will depend on the specific circumstances.
If he is receiving Improved Pension, a needs based benefit, the benefit will end at his demise and mother will have to apply for a survivor’s benefit. The bottom line for mother is that as the surviving spouse of a wartime veteran she will absolutely be able to apply for survivor’s Improved Pension (technically called “Death Pension”); the full award for 2014 was $1,130 per month.
If, in fact, your father is receiving disability compensation currently you should look at applying for Improved Pension now. The maximum award for a couple is currently $2,085 per month. You may wish to contact your regional VBA office to verify the nature of your father’s benefit: http://www.benefits.va.gov/manchester/ see more
Question
Will my Mom lose her Veterans Aid and Attendance Benefit if she leaves assisted living, and instead lives at h...
Pamela...as long as your mother continues to have Unreimbursed Medical Expenses that exceed her gross income (after a 5% deductible) she... Pamela...as long as your mother continues to have Unreimbursed Medical Expenses that exceed her gross income (after a 5% deductible) she continues to be eligible for the full VA award (currently $1,130 per month). see more
Question
If you saw the bad result of a guardianship - what steps would you do now to make sure it doesn't happen to yo...
A Durable Power of Attorney may not be desirable in the near term because it invests the Attorney in Fact with powers immediately (some... A Durable Power of Attorney may not be desirable in the near term because it invests the Attorney in Fact with powers immediately (some states permit "springing powers" upon incapacity but others, like Florida, do not).
A revocable living trust is a great instrument that can be drawn so as to permit a successor trustee accession only upon the incapacity or death of the initial trustee. Note: The biggest shortcoming of this estate plan is that people fail to re-title assets into the name of the trust...only assets titled in the name of the trust are governed by the terms of the trust!
A well constructed Elder Care Financial Plan will also include a declaration of a "Pre-Need Guardian". see more
A revocable living trust is a great instrument that can be drawn so as to permit a successor trustee accession only upon the incapacity or death of the initial trustee. Note: The biggest shortcoming of this estate plan is that people fail to re-title assets into the name of the trust...only assets titled in the name of the trust are governed by the terms of the trust!
A well constructed Elder Care Financial Plan will also include a declaration of a "Pre-Need Guardian". see more
Question
My Mom is a beneficiary to a life insurance policy. How can she avoid this affecting her community Medicaid?
The receipt of the proceeds from the life insurance policy (countable asset) is most certainly a Medicaid disqualifying event. However in... The receipt of the proceeds from the life insurance policy (countable asset) is most certainly a Medicaid disqualifying event.
However in Florida, if countable assets are disposed of in manner that does not impose a Medicaid eligibility penalty in the same month they are received, it is quite possible that no penalty will ensue.
Otherwise, for each month your mother is over the asset limit of $2,000, she will not be eligible for benefits.
In addition to the other suggestions provided, there may be other options to preserve the proceeds for your mother's benefit while she is receiving Medicaid.
Consider a Personal Service Contract between you and she. The value of the contract can be paid in lump sum to you without penalty (may be a taxable event).
Also consider using a Supplemental Needs Pooled Trust. Transferring funds to this existing irrevocable trust sponsored by 501c3 organizations allow her to maintain Medicaid eligibility while having access to the funds transferred for almost anything related to her health, maintenance, and welfare while receiving benefits.
Does she own a home with a mortgage that can be paid down?
I encourage you to explore all the options available to preserve the cash for her use while she is receiving Medicaid benefits. see more
However in Florida, if countable assets are disposed of in manner that does not impose a Medicaid eligibility penalty in the same month they are received, it is quite possible that no penalty will ensue.
Otherwise, for each month your mother is over the asset limit of $2,000, she will not be eligible for benefits.
In addition to the other suggestions provided, there may be other options to preserve the proceeds for your mother's benefit while she is receiving Medicaid.
Consider a Personal Service Contract between you and she. The value of the contract can be paid in lump sum to you without penalty (may be a taxable event).
Also consider using a Supplemental Needs Pooled Trust. Transferring funds to this existing irrevocable trust sponsored by 501c3 organizations allow her to maintain Medicaid eligibility while having access to the funds transferred for almost anything related to her health, maintenance, and welfare while receiving benefits.
Does she own a home with a mortgage that can be paid down?
I encourage you to explore all the options available to preserve the cash for her use while she is receiving Medicaid benefits. see more
Question
My Mom is a beneficiary to a life insurance policy. How can she avoid this affecting her community Medicaid?
yellrihis... I am glad to hear you explored options to preserve the life insurance proceeds for your mother's benefit while she is... yellrihis...
I am glad to hear you explored options to preserve the life insurance proceeds for your mother's benefit while she is receiving Medicaid benefits.
Since you already sought the advice of counsel (I would never recommend one NOT seek legal advice if they felt it in their best interest to do so) I will tell you that you do not need a lawyer to participate in a Supplemental Needs Pooled Trust (SNT).
As you have discovered, this is an existing trust arrangement already established by a 501c3 non-profit specifically for Medicaid beneficiaries who are over the resource limit. As such, a new document is not being drawn; your mother (or you as POA if she does not have capacity) will be signing a joinder agreement which is a pretty straightforward document. The trustee will explain the circumstances and procedures for distributions for mom's needs and what happens at mom's demise. If at anytime you feel uncomfortable you can always halt the process and seek counsel.
Another consideration is notifying Medicaid of the change in financial circumstances. Will the attorney do this as part of the fee in question or are you comfortable doing that yourself?
Money from the trust can be used to pay mom's attorney AFTER it is placed in the trust. Technically, the funds could be used to pay the attorney before being placed in the trust as well but you might get some push-back from Medicaid and it is not worth taking the risk.
As mentioned a moment ago, you will make requests for distributions from the trustee. Usually bills are paid and then submitted for reimbursement. Some organizations will allow a "purchase order" to be submitted for an advance distribution towards a purchase and recurring expenses can often be set-up to be paid by the trust automatically. Most trustees pay bills every two weeks.
The downside to the SNT (some would say) is that it is a Medicaid "pay-back" trust in that any funds remaining in the trust at your mother's demise will first be used to either pay Medicaid back for cost of services delivered up to the cost of those services before any residual is distributed to heirs. (Alternatively, the non-profit organization can be the beneficiary of the amount due Medicaid).
If there is no money left in the SNT at mom's demise, then Medicaid will receive nothing back.
Some look at this as a negative but I look at it as good public policy. As noted by other posters, Medicaid is a taxpayer funded program for the needy - not a bank for those who have assets.
Alternatives? Both Mr. Heiser and I made other suggestions earlier. It is possible to use more than one alternative simultaneously. see more
I am glad to hear you explored options to preserve the life insurance proceeds for your mother's benefit while she is receiving Medicaid benefits.
Since you already sought the advice of counsel (I would never recommend one NOT seek legal advice if they felt it in their best interest to do so) I will tell you that you do not need a lawyer to participate in a Supplemental Needs Pooled Trust (SNT).
As you have discovered, this is an existing trust arrangement already established by a 501c3 non-profit specifically for Medicaid beneficiaries who are over the resource limit. As such, a new document is not being drawn; your mother (or you as POA if she does not have capacity) will be signing a joinder agreement which is a pretty straightforward document. The trustee will explain the circumstances and procedures for distributions for mom's needs and what happens at mom's demise. If at anytime you feel uncomfortable you can always halt the process and seek counsel.
Another consideration is notifying Medicaid of the change in financial circumstances. Will the attorney do this as part of the fee in question or are you comfortable doing that yourself?
Money from the trust can be used to pay mom's attorney AFTER it is placed in the trust. Technically, the funds could be used to pay the attorney before being placed in the trust as well but you might get some push-back from Medicaid and it is not worth taking the risk.
As mentioned a moment ago, you will make requests for distributions from the trustee. Usually bills are paid and then submitted for reimbursement. Some organizations will allow a "purchase order" to be submitted for an advance distribution towards a purchase and recurring expenses can often be set-up to be paid by the trust automatically. Most trustees pay bills every two weeks.
The downside to the SNT (some would say) is that it is a Medicaid "pay-back" trust in that any funds remaining in the trust at your mother's demise will first be used to either pay Medicaid back for cost of services delivered up to the cost of those services before any residual is distributed to heirs. (Alternatively, the non-profit organization can be the beneficiary of the amount due Medicaid).
If there is no money left in the SNT at mom's demise, then Medicaid will receive nothing back.
Some look at this as a negative but I look at it as good public policy. As noted by other posters, Medicaid is a taxpayer funded program for the needy - not a bank for those who have assets.
Alternatives? Both Mr. Heiser and I made other suggestions earlier. It is possible to use more than one alternative simultaneously. see more
Question
How does the caretaker survive after spending all investments on patient?
If you are in Florida as your posting name suggests, your husband will very easily qualify for Medicaid and all of your assets possibly... If you are in Florida as your posting name suggests, your husband will very easily qualify for Medicaid and all of your assets possibly retained if you exercise "Spousal Refusal". Florida is one of the very few states that permit this.
Believe it or not, it works essentially like this:
1. All assets are transferred to the Community Spouse (CS) - the spouse not applying for benefits.
2. The CS signs a form stating he/she refuses to support the Medicaid applicant. (This form can be found on the DCF website).
3. The non-CS applies for Medicaid.
4. As a result, all assets that now belong to the CS's are not subject spend down or qualification limitations.
The caveat here is that as a result of claiming "Spousal Refusal" the CS will not be able to receive any of the spouse's income for her own needs if she would have otherwise been eligible for same (Spousal Income Diversion).
The pro's and con's of this approach need to be weighed carefully if the numbers are close.
The information above is provided for educational and informational purposes only, is generally available public information, and should not be be considered financial or legal advice. see more
Believe it or not, it works essentially like this:
1. All assets are transferred to the Community Spouse (CS) - the spouse not applying for benefits.
2. The CS signs a form stating he/she refuses to support the Medicaid applicant. (This form can be found on the DCF website).
3. The non-CS applies for Medicaid.
4. As a result, all assets that now belong to the CS's are not subject spend down or qualification limitations.
The caveat here is that as a result of claiming "Spousal Refusal" the CS will not be able to receive any of the spouse's income for her own needs if she would have otherwise been eligible for same (Spousal Income Diversion).
The pro's and con's of this approach need to be weighed carefully if the numbers are close.
The information above is provided for educational and informational purposes only, is generally available public information, and should not be be considered financial or legal advice. see more
How does shield a residence affect nursing home options?
The first issue is whether a primary residence is considered a countable asset at application. If there is a spouse or disabled adult child also residing in the residence then it is not countable. If not, then the overarching concept to maintain non countable status is "intent to return" as expressed by the applicant. Some states require that the ability to return to the primary residence be declared by and/or be demonstrated as physically possible and may limit that status for a certain period of time at which point the property would be deemed countable. Other states, like Florida, automatically assume intent to return and do not count the property as an asset as long as it remains titled in the Medicaid recipient's name or if they retain an enhanced life estate in the property.
The second issue is what happens to the property upon the demise of the Medicaid recipient. All states have Medicaid Estate Recovery programs which require them to seek assets for Medicaid "payback" at the demise of recipient. Some states only seek probate assets which means if the property is so titled as to avoid probate it is not recoverable by the state. Other states have authority to seek all assets, probatable or not, including the primary residence.
There are exceptions.
If there is a spouse or disabled child living in the home recovery will not be sought.
If adult child caregiver(s) live in the home for at least two years prior to the application for benefits the property is not recoverable. In this case the caregiving role and the need for it must be expressed in writing and certified by a medical professional before the two years commence. There caregiver's residence in the home must also be established.
Lastly, some states (again like Florida) have strong homestead protections and if the property is subject to probate it can still avoid recovery if a judge issues an "Order of Homestead" during the probate proceeding. In this case, if the property is devised to a lineal descendant it will not be subject to recovery even though it is a probatable asset.
The above is for educational purposes and is information generally available to the public. It is not to be construed as legal advice. It is recommended to always seek appropriate counsel. see more